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  • Both Jim O'Neill And I Are Bullish On China; I'm Also Bullish On Longwei Petroleum [View article]
    Jeffrey, sounds great. Well we'll just to wait to see which date they pick. Since many parties have already expressed interest to attend this event as the company said in news release, I can imagine that it is challenging to arrange a good date for everybody. I,ve told the CFO that any date is good for me or my colleague except Christmas to New Year.
    Nov 3 11:08 AM | Likes Like |Link to Comment
  • Both Jim O'Neill And I Are Bullish On China; I'm Also Bullish On Longwei Petroleum [View article]
    Jeff, no problem. Hope to meet you some time in the future. BTW it is not necessarily in December. November and early January are also possible in my opinion.

    Kevin
    Oct 31 04:22 PM | Likes Like |Link to Comment
  • Both Jim O'Neill And I Are Bullish On China; I'm Also Bullish On Longwei Petroleum [View article]
    Jeffrey,

    Per the news release this is a public site visit event. So most likely they'll gather all investors at their Taiyuan headquarter first and then lead them to tour their Taiyuan, Gujiao, and Huajie faclities. In doing so they might need to rent a bus for the day. Per the news release they are still trying to decide a date and other details. There seems to be quite some institutions wanting to go. So, scheduling wise it is a little bit challenging I guess. We'll have to see. I think it probably will be before mid December. If you are interested in going, you can email the CFO and tell him your preferred dates.

    Kevin
    Oct 30 12:53 PM | 1 Like Like |Link to Comment
  • Both Jim O'Neill And I Are Bullish On China; I'm Also Bullish On Longwei Petroleum [View article]
    Jeffrey,

    Just got a chance to read your article in full. Good piece.

    I browsed your website. It seems that you are doing some serious coverage for Chinese small caps. As you can see in today's news, the company is going to host a public site touring day soon. Me or another analyst from Maxsoar will be there, unless the date they pick is terribly bad for us (e.g. 12/25). There are already several big investors in my circle going to the site tour. Are you interested in attending? Aside from seeing Longwei in action it may become a nice get together for all big buyers of Chinese small caps.

    Kevin
    Oct 29 12:31 PM | 1 Like Like |Link to Comment
  • The Lesson Learned From Actions Semiconductor's Q2 2012 Results [View article]
    Van,

    I believe their biggest fund investor has already been asking all hard questions that matter the most in CC. Yes I agree that they should do more to better use their monter amount of cash. Either they should buyback more stocks (using other types of procedures of course) or put the money in investments that yield better return. If they do not expect to implement massive shareback in short horizon, maybe they should lend $20M - $50M to other companies such as Longwei Petroleum (LPH) that can generate good profit from additional capital influsion for 10% annual interest rate.

    Kevin
    Oct 25 02:29 PM | Likes Like |Link to Comment
  • The Global Economic Outlook: A Direct Path To Chinese Equities [View article]
    Wonderful piece of writing. I especially like your analysis of Chinese, American, and European economies.

    One problem for many American investors who want to invest in undervalued Chinese companies with strong business and prospect is that many of them are about fed up with this capital market by now and may give American investors 20% - 50% token premium to go private pretty soon and kiss U.S. capital market goodbye. Then, the'll relist in Hong Kong or China for several times of their current market capital.

    Kevin
    Oct 21 07:22 PM | 2 Likes Like |Link to Comment
  • Top 5 Performing China Stocks During The Week Ending October 19 [View article]
    Markus,

    Wow! Impressive work. Just to point out one typo in the article: Longwei's insider ownership is 67% as shown on Yahoo Finance: http://yhoo.it/QKI3yj

    Kevin
    Oct 21 07:12 PM | 2 Likes Like |Link to Comment
  • An Exodus Of U.S.-Listed China Stocks Is Inevitable [View article]
    CNTF is a mobile equipment maker that has been in public in the U.S. for long long time. I think they still have good patents and technologies that have good potential. Their new gaming division also has quite interesting R&D capability and cool products. They just have to turn these intangible qualities into increased revenue to turn around their bottom line.

    Also, like ACTS, they'll need to think about how to deploy the huge pile of cash sitting on their book right now.

    I have not studied CNTF inside out. So, I'd suggest that you read Markus and some others' articles to learn more.

    Kevin
    Oct 17 01:21 PM | Likes Like |Link to Comment
  • An Exodus Of U.S.-Listed China Stocks Is Inevitable [View article]
    What I meant was that I estimated $4 is the minimum price that any suitor (including the insiders) can avoid getting sued for "price too low".

    In the case of outside bid from a financial institution, I believe the CEO won't sell his stakes and give up the empire he has spent 20 years building for less than $5 per share. So, apparently the bar for outside suitor is higher.

    Kevin
    Oct 17 12:41 PM | Likes Like |Link to Comment
  • An Exodus Of U.S.-Listed China Stocks Is Inevitable [View article]
    Good thinking Johan. Indeed that can be the case, and that's maybe why institutions are so excited about the stock right now. We have a safe stock to invest at dirt-cheap price, and the potential gain in LPH may not be capped as in the cases of many other Chinese small caps.

    On the other hand, you never know. A big institution can still dump a $4 buyout offer on LPH any time it wants. Of course, I'd prefer it not to happen, but we just cannot stop somebody from doing it. As with 95%+ of buyout offers, most traders and buyers are shocked the day they see a buyout offer announced.

    Kevin
    Oct 16 06:06 PM | 2 Likes Like |Link to Comment
  • An Exodus Of U.S.-Listed China Stocks Is Inevitable [View article]
    Ren,

    My colleague Jessica, Eric, and Steve gave a very professional and pertinent assessment of the impact of the exercising of these warrants to the stock's EPS on page 16 of our update report:

    http://bit.ly/PADtHS

    I don't want to expand too much more on this topic. My guess is: it is just 11% one-time increase in shares outstanding VS 11% or more one-time increase in EPS. One way or another, this topic will be completely closed on 10/29. I personally think most institutional investors probably don't care how many of the 11.5M warrants are exercised. That's why they don't stop buying huge volume right now before warrant expiration.

    Kevin
    Oct 16 05:59 PM | 2 Likes Like |Link to Comment
  • An Exodus Of U.S.-Listed China Stocks Is Inevitable [View article]
    Johan,

    Nice article.

    That's why the market has started to correct serious underpricing of some real and strong companies like LPH. Basing on my understanding of the executives, the two biggest shareholders Cai and Xue will not sell any new shares or warrants under $3, probably not even $3.5. If somebody including Cai and Xue want to take LPH private, the offer price has to be at least $4 to be minimally acceptable. $5 is probably the minimal price at the lower bound of the really fair range.

    Some people still don't understand and appreciate enough of this single point of this chairman who with his fellow Xue still hold 66% of the company. They are running this business in the most honest and stable way, and they will get return the same way all minority shareholders do. No need to yell at them not diluting public shareholders' shares. If there is any dilution it hits them harder than anybody else.

    So, to all these greedy I-banks who want new shares below $3, Cai says: "thanks but no thanks. Go talk to weaker companies".

    BTW, Morgan Stanley is cashing out its $50M investment in YONG, guess which one is its naturally choice to put its money at next? How many people seriously think that there is a safer bet than LPH among all Chinese small caps right now?

    Kevin
    Oct 16 05:27 PM | 3 Likes Like |Link to Comment
  • Longwei Petroleum: On Its Way Back From Valuation Hell [View article]
    Since when "might be" = "absolutely be" in English? The CFO clearly answered to in Q&A session that the additional funding was only needed to put "extra inventory" in Huajie to speed up revenue and profit run rate and that they had the ability to close it using their own cash, which they chose to do at the end probably because the lender did not provide good enough term to the company at that moment.

    He also clearly said that the lenders were giving the company several options including debt and equity financing. The fact that the banks gave them equity financing as an option didn't mean that they had to take it. It is that plain and simply. They did not take that option because they DID NOT WANT TO DILUTE shareholders.

    Speaking of equity financing, there can be all kinds of direct/indirect equity financing. $30M 10% fixed interest loan with 1M warrant exercisable at $5 per share is a financing that includes some sort of equity in it. The potential increase in share in this case will be minimal and the price is not that "unfair" to current shareholders, ok?

    Also, don't equate yourself with institutions, who as a group is net buying on the stock, and don't make fool of yourself on relying your judgment on a company simply by some occasional price gyrations that very possibly were results of pure manipulation.

    It is very obvious to me that the dip on 9/21 was an outright manipulation, especially the 200K block wash trade the last 5 minutes of the session. The manipulator has one and only one goal in mind: to scare as many investors into giving up their shares at cheap price as possible before the most heavy-weight positive news is released very soon (can be next week). If you still need more hint on this manipulator's trick, see the following summary:

    Preset: A lot of weak investors waiting for recon for a long long time and finally lost their patience just right before the dawn

    6/1 price drop %: 10.35%
    Previous day (5/31) drop: 4.3%
    Volume compared to previous day volume: 335%
    Day of Week: Friday
    Price hit absolute short-term bottom, went on to appreciate 70% to $1.74 in a month (7/3/2012)

    Preset: A lot of weak investors waiting for Huajie closing for a long long time and finally lost their patience just right before the dawn.
    9/21 price drop %: 10.37%
    Previous day (5/31) drop: 6.25%
    Volume compared to previous day volume: 321%
    Day of Week: Friday
    Price hit absolute short-term bottom, went on to appreciate xxx% (200%)?

    See the light?
    Oct 12 02:00 PM | 3 Likes Like |Link to Comment
  • Longwei Petroleum: On Its Way Back From Valuation Hell [View article]
    The findings of PCAOB and its recommendations is this letter is vague and not very strong. It did not even remotely suggest that the firm's clients' statements were falsified or anything. More importantly, the firm has responded to PCAOB and said clearly that it would implemented additional measures to boost its auditing practice.

    Almost every accounting firm including big 4 got some "suggestions" from PCAOB once a while, stop intentionally pulling out 2 year old inconclusive info to try to influence people's view on a company that has done tons of strong measures to prove itself. People are doing it simply because they want to pursuade people to take profit and sell on any upswing so that they can get in because they missed it earlier.

    This kind of unethical behavior needs to be stopped in the financial market.

    Kevin
    Oct 12 11:25 AM | 3 Likes Like |Link to Comment
  • Seeking Alpha In Chinese Companies' Privatization Spree [View article]
    Sunset,

    I do know the situations in China very well. I am not saying that there is no or very few kick backs. My key point is that these government officials that got kick backs get rather "reasonable kick backs" from tons of companies, not super kick backs that equal every company's 50% of assets that kill most companies. As you said, if it becomes so severe, somebody will expose them and they'll be sued. As Chinese saying goes, these government officials cannot and normally will not "kill chicken to get eggs in its belley". They know their limits.

    Huge kick back to government from one company (relative to its total profit and asset) does occur but only on a very rare basis. There is a difference between saying that a company in China may need to give government officials 1% of its revenue to make its business run smoothly and that most Chinese companies need to give 50%+ of its annual revenue or 50%+ of its total asset to a government official and thus no Chinese stock is worth investing. It will be like saying in the U.S. many companies need to pay sales people commissions to push sales and therefore there is a huge risk in investing in any American companies because an influential sales person may demand a company to give him/her 50% of the company's revenue as his/her commission and as a result bankrupt the company. Case like this does exist, but again only on a rare basis.

    Even after all the kick backs to government officials, Chinese companies in average still make as goog, or probably even better profits, than American companies. That's why there are still so many people eager to start their own businesses in China and why the country's overall economy and business can grow so much over the past two decades. This is simple and undisputable facts.

    One thing to keep in mind: American companies and citizens in average pay much higher tax rates to government than Chinese companies and citizens, and there are serious complaints about many government officials earning jaw dropping level of annual compensation while 90% of Americians are suffering in bad economy right now. So, in reality the total compensation as % of GDP the society (companies and people) give to government agencies and employees might be the same or close in China and in the U.S.

    Kevin
    Sep 20 10:56 AM | Likes Like |Link to Comment
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